Judge says Loomis councilman knowingly violated pension law

A Loomis town councilman knowingly violated state law for three years by collecting a $60,000 salary for a part-time fire chief job while also receiving a $137,000-a-year pension, a state administrative judge has found.

The proposed decision would uphold an earlier determination by the California Public Employees’ Retirement System that David Wheeler could not collect his state pension from a previous job in Alameda while working for the Loomis Fire Protection District, a practice known as “double-dipping.”

The proposed decision by the administrative judge adds new details about actions by Wheeler and the district after CalPERS initially notified him in 2010 that he could not continue receiving his pension and Loomis pay simultaneously.

The pension giant called it a “five-year scheme” by Wheeler and the district to defraud the system. According to CalPERS, collecting a pension while working a job more than 960 hours a year is a violation of state law.

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Attorneys for Wheeler and the district have said they did not knowingly violate the law.

“This has been the biggest, most outrageous scandal in the city’s history, and that’s no overstatement,” said Bill Branch, a local activist who helped lead the town’s incorporation efforts more than 30 years ago and has worked to expose Wheeler’s actions. He said the district has never acknowledged the violations.

The CalPERS board is scheduled to vote on the proposed decision Oct. 21. Judge Dian M. Vorters found Wheeler should pay back the $460,000 in benefits he illegally received while working for the Loomis district, and the district and Wheeler should pay CalPERS for employee and employer contributions owed to the fund during his employment in Loomis.

The district and Wheeler also owe CalPERS for the costs of the state administrative case, which resulted from Wheeler’s appeal of a CalPERS decision in 2013, Vorters found.

District officials did not return messages, and Wheeler said it would be inappropriate to comment until the CalPERS board makes a decision. Wheeler left the district at the end of 2013. He was elected to the Loomis Town Council in 2012 and served as mayor last year.

The fire district did not contract with CalPERS when it hired Wheeler in 2007. When the district joined the pension giant in 2010, a CalPERS employee told Wheeler he could not continue to work for the district and collect his pension.

In a December 2010 letter, CalPERS told Wheeler he must either end his retirement or stop working for the Loomis fire district.

Instead, Wheeler continued to argue that he could work as fire chief and collect his pension as a “retired annuitant,” even though CalPERS told him annuitants could not work more than 960 hours a year and his agreement with the fire district required him to work more, according to Vorters’ proposed decision.

In 2011, a CalPERS employee again reminded Wheeler of his obligations under the law, and he indicated that the district was looking for a replacement, according to Vorters. The CalPERS employee testified she had assumed Wheeler had left the district and had no contact with him until a reporter contacted the retirement system about his district job in early 2013.

Later that year, CalPERS initiated an audit of the fire district, finding Wheeler and the district in violation of pension law, among other things. The audit and subsequent administrative hearing revealed that Wheeler and the district had taken numerous actions to try to bolster his argument for continuing his employment-pension arrangement, including repeated changes to the language in his employment agreements, according to CalPERS.

Wheeler argued in 2010 that he held a temporary position as chief, and thus qualified for an exemption from double-dipping restrictions, court records show. He had already had the job for three years, and continued to argue he was a temporary hire for another three years, undermining his claims, Vorters found.

Attorneys for CalPERS accused Wheeler and the district of intentionally violating the law: “The facts in this case establish without a doubt that respondents’ initial and continuous appointment of Wheeler was undertaken in full awareness of the applicable provisions of the (Public Employees Retirement Law). Their conduct, in violation of law, was not due to an excusable mistake, but was the result of deceit.”

Attorneys for the district and Wheeler say they “made every effort to comply with the law and were repeatedly misinformed and misguided due to errors committed by CalPERS staff.”